down and have a look at me♪ ♪ come on, baby, don't say maybe♪ ♪ i got to know if your sweet love is gonna save me♪ ♪ >> we're in the middle of a revolution and the numbers confirm it. we are rapidly changing where and how we shop. good morning, everyone. under the thanksgiving holiday sales dropped, but on-line surged, staggering sales growth at amazon and ebay. yesterday alone, on-line sales went up 20% and there's more. about one third of the sales were made using smart phones and tablets. we have another report this morning that says traffic in those bricks and mortar stores down 4% on-line surging. and in this new world, apple

remains on top, ipads alone were nearly 20% of all target store sales, that's huge. one last one, there is a mystery tipper on the loose, dropping thousands of dollars in restaurants across the country. and "varney & company" is about to begin. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the tradg floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. yep. got all thcozies. [ grandma ] with n fedexne rate, i could ll a box and ship it r one flat rate. so i kn untilt was full. you'd be crazy not to. is tt nana? [ male announcer ] fedex one rate. simple, flat rate shipping witthe reliability of fedex.

let's get going with your obamacare update, it's not good. the headline from "the washington post" bugs playing healthcare.gov enrollment. if you listen to the obama administration, it's running fine, thank you very much. the paper reports if you signed up for a health care plan using the federal exchange there's a good chance you might not be actually enrolled. one third of the applications may contain errors that will prevent the applications from being processed. that's chaos. today the president begins a new push to highlight all that's good about obamacare. 2:30 eastern he speaks. time is money and headlines

here they come. they're all tech related. and according to a new report we find out what the mystery google barges are for and that the barges will be retail locations to sell in market, google glass. three in total. travel up and down the east and west coast. on-line is king, cyber monday sales at amazon up 44% year over year, ebay up 32%. and big money on-line shopping. question, what happens to the malls now? apple makes a play on twitter, buying up a firm that analyzes tweets. how much? a cool $200 million. and ups says, it, too, is working on a drone delivery system. amazon revealed its plans for that similar service sunday night and ups is apparently in that game. now, we have to tell you, we're looking at a lower open forrthe stock market, the futures down minutes before the opening bell, but, wait, some of the best known bears we hear are in retreat giving up and sarg that

the market is on a tear and will continue to go higher. we have details on the retreating bears. the markets open next. ♪

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♪ have yourself a measured merry little christmas♪

>> yes, the on-line retailers are having a merry christmas and especially with mobile devices. that's one of our themes today. and here we come, the opening bell is about to ring. one minute from now. and here is scott shellady in his cow jacket in chicago. all right, scott. down 70 yesterday and probably going to open down another 60 or 70 today. and give me the reason du jour for the lower markets? >> the reason du jour is a couple of things. the market got surprised yesterday, it was better than expected pmi, the construction spending and puts the paper back on the table and we start the defensive plays and europe has a couple of bad numbers as well and we're opening up on the defensive and nonpayroll on friday. and the only good news i have for you, the fed will be back in and infusing the market with 4 billion again today and that's proven over history to

be supportive of stocks and see if that can stop the slide. stuart: you've forgotten something, people have made an awful lot of money on the stock market and they're taking some of the money off the table. >> that's a good one, too. stuart: thank you, scott. check the big board, and the bell finished ringing and when it starts ringing, the market is open and trading begins and we're going to be down. i don't know how much, probably 60 points, maybe 70, but we are going to be down in the early going. look at this, big dollars spent on-line over the thanksgiving holiday weekend. internet sales just exploded. 29% of the sales, by the way, were on mobile devices, and that's the smart phone and tablets. amazon sales up 44% yesterday. compared to last year, ebay up 32% and those stock prices are mixed and ebay is up more and amazon retreating a little. 390 for amazon and had an

extraordinary rally. now, look at groupon, record sales this weekend, half on mobile devices and that stock is up 4% right now. and what are people buying? i'll tell you, ipads. nearly 20% of target's total sales were accounted for by that one item, the ipad. so, let's start with nicole and the check on apple shares. >> take a look, right now, it's approaching 560 at the moment. up 1 1/2%. and jason from seaport securities, he's been right about that. raised a buy today and raised the price target to 650 up from 540. stuart: thank you. joining us is the former paypal ceo and liz macdonald, bill, to you first. this is your doing, isn't it? you started paypal, and you sold it to ebay, paypal is doing fantastically wellment

you opened upjohn line. >> there were many people involved in paypal and you look at mobile payments to paypal are up over 500%, both u.s. and globally. stuart: this is a revolution. >> it is. stuart: in where we shop. i think we're moving towards on-line very rapidly. >> why he. stuart: and how we shop. the movement towards smart phones and tablets which you just described, that's a revolution. >> it's huge, huge, and one of the things, it feels like an overnight success, but in fact, it's been growing for ten years, and it's now just hitting its inflection point. and so many things that appear as if they were overnight successes really had a decade or more in preparation. >> one last word for you. what do you make of that statistics at target sales, and the ipad from apple, 20%. >> it's astonishing and

particularly ironic that 20% of the sales of a physical location store are selling people the devices never to have to go back into that physical location. stuart: precisely right. liz mcdonald, am i going too far when i say it's a revolution to switch to on-line selling and it's another revolution to switch to mobile devices? am i going too far? >> i don't think you're going too far. you're talking cyber monday in europe in places like the united kingdom. your home country. although i don't think that cyber-boxing day has the ring to it. people don't like the heavy bags, they don't like the crowds, they don't like standing in line and they don't-- the women don't want to deal with the circus hall of mirrors that the dressing room mirrors are. the big problem for the cyber, you know, pros here, people who are pro cyber monday is the fact that people feel like they're being stalked on their internet systems with cookies, with being loaded into

algorithms. and i personally think i have to take out a restraining order on my facebook or-- >> it's exploding. the worst publicity that bricks and mortar got bass on black friday when we ran videotape and so did everybody else in town of people fighting, pushing, shoving, crowds, trampling. >> there was a taser event with a stun gun and people treat it now like a sport to go out and other people, families treat it like a thing to come together and go shopping. it's a revolution and more and more people are on-line. >> it's not on-line versus physical. it's exactly as you say, the customer experience. and in a physical location, it's often not that good. the customer experience on-line has become better and better as people make it simpler and easier. stuart: even i can-- i got an iphone for two and a half weeks now and even i can

use it to shop on-line. >> that's progress. stuart: two items this oiled season, microsoft xbox one, and sony's playstation 4. the initial numbers are in. xbox one made up of all video game consoles made up on black friday and playstation 4, 15% of all consoles. and compare the two stocks with the sales numbers there. >> it's very interesting, right. when you saw, first of all, they're doing great. and xbox outpacing sony and both stocks are slightly to the down side and the major market averages also right now pulling back and the other thing is microsoft is pushing the xbox 1 as a full media experience, not just games. stuart: when i see microsoft at 38.40 as it is now, i'm thinking retirement, you know? and i'm all for the xbox 1, believe me because i own microsoft stock as everybody knows. nicole: if they sold 800 million billion xbox one, you'd still be here because you love

fox business. stuart: you're right, thank you, nicole. apple still rules and i've got an example for you, it bought a company called topsy and paid 200 million for it. topsy analyzes twitter conversations. now, liz, i want to know this. how big is topsy? any idea how many employees? >> they only have about four dozen employees, just four dozen. stuart: four dozen employees for a company that's virtually brand new, five years old? >> started in 2006, seven years old, right. stuart: and they're worth $200 million for four dozen employees liz: there you go, right? that's something. stuart: another story we've gotten used to this huge monies for tiny companies with a brilliant on-line or internet idea liz: and wantiig to traffic dialog on the internet, what people are excited about. stuart: all right, bill harris, you're responsible for the successes 0 on-line. what do you make of apple buying topsy that analyzes

twitter feeds. what's that about? >> first of all, the reason that topsy is so valuable, it's only one of four certified data resellers of twitter data. so they're in a very prominent position in order to get incredible depth of data as to what people are doing on-line. now, why do apple want it? apple is not trying to compete directly with twitter, but what they're trying to do is assume the customer interface to twitter feeds. so, i think what they're going to do is use the data to make twitter feeds more relevant and personal for individual users. >> the twitter feeds liz: and what apple is doing, easily stream from the apple devices onto twitter and apple is making it more easy for them to go on twitter and social media feeds. stuart: is it worth 200 million? >> absolutely, yes. stuart: how many employees did paypal have when it was sold to ebay? >> we had quite a few because--

>> quite a few? >> because they had big customer service organization. so, we probably had about a thousand, but the outside of the customer service maybe 100. stuart: so i can criticize you for concentrating wealth and not employing many people? >> you can criticize me for whatever you like. >> i probably will. stay right there. and we flashed the numbers on four just a moment ago. ford sales up 7% in november compared to last year, and by the way, the fusion sales, remember, they tried to sell me one of those things, outside the studio, a couple of weeks back and they're up 51% and the f-soo f-series trucks were up. and chrysler, a standout. their sales were up 16% in november. can this be? big investors known for betting against the market are now saying, buy it. liz macdonald has the story. >> i'll tell you something, my sources on the equity trading desk are abuzz about this.

they're struck by the fact that the perm ma bears are put on their heels. recognizable like hugh hendrie, jeremy, not just david rosenburg and more. and what we're watching, too, what the perma-bears have been saying. they're saying that they could see a correction now in two or three year's time and they say that the s&p advancing 18% and bank of america out now with a new report saying the s&p up another 18% at 2014. and so, these guys, jeremy grantham-- >> that's a turn around liz: that's a turn around and jeremy grantham is going to see what is difficult to see beyond a severe economic shock, what will look at the fed's intervention and pushing in the market. >> that's interesting news, they're right. the question, what happens to malls if force like j.c. penney and sears close up shop and with this ongoing revolution of on-line shopping?

what happens to the mall? what will the mall look like in the future? bill harris is still here and he will answer the question. ♪ you better not shout, you better not cry♪ ♪ you better not pout i'm telling you why, santa claus is coming to town♪ ♪ santa claus is coming to town♪ clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webins. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade li everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

every day we're working to and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

so ally bank has a that wothat's correct.a rate. cause i'm really nervous about getting trapped. why's that? uh, mark? go get help! i have my reasons. look, you don't have to feel trapped with our raise your rate cd. if our rate on this cd goes up, yours can too. oh that sounds nice. don't feel trapped with the ally raise your rate cd. ally bank. your money needs an ally. >> another modest pullback, but we're below 16,000 on the dow as we speak. what about the price of gold? down another dollar. 1220 right now per ounce. citibank raises its price target, and we bring you this because that was a charles payne take and it's up another 1% this morning and tesla, it says that germany has concluded the car fire probe on its model

f. and will pursue no further measure, that case is closed. the stock is up nicely on tesla, back to 133. shopper track reports that traffic at the number of people going into bricks and mortar stores down 4% this year. now, you couple that with the increase in on-line and mobile device shopping. what does that mean for the traditional law. and former paypal ceo bill harris, the man partly responsible for all of this, he's still with us. what's the mall of the future going to look like. >> i think the mall of the future we already have today. it's amazon, it's ebay. ebay for used, amazon for new. and upscale products. there are many products on-line. stuart: what happens to the physical mall. >> i think it's a slow, gradual and glorious sunset. stuart: my theory is if a

couple of big name department chains go out, what replaces them? >> i don't think that you have anything that replaces the big department stores. i think what you have is smaller malls, more convenient to people and so you don't have to travel as far, without the necessity of the big anchor tents. stuart: so that's a real revolution? >> i think so. stuart: that's a sea change. this is the inflection point, this thanksgiving holiday weekend, this holiday period that we're now in, is this the moment of of the real sea change? >> well, it's tough to put a particular day, but, yes, i think this is-- this is the rolling, the cresting of the wave. it's been coming for a while and while it has been coming-- while it has, you know, the electronic and mobile stuff has been growing so quickly, people have continued to invest in physical location and i think right now this country is

overinvested. it's similar to, in the arena that i work, if nl-- financial services. personal capital, my company, we now have 60% of our usage from mobile devices. and almost 100% of our usage in on-line devices. >> what's that, people executing orders or checking on the status of their account, that kind of thing. >> from the iphone, android, et cetera. it's a complete flip. now, think about the traditional banking environment. if you go back to 1970, short of your father's branch, and since then we've had the introduction of atm banking, of telephone banking and on-line banking and now mobile banking, each of these a substitute for the branch. so, one would expect that today we would have fewer branches. one would be wrong. today there are four times as many bank branches in the united states as there were in 1970. >> how do you explain that?

>> massive overbuilding because of the traditional notion of how you sell. you sell by marketing to people locally and opening a new one and marketing to people locally. as a result there's a tremendous overbuilding of the physical infrastructure of banking just as there is for retail and i think all of that will face a decade of deconstruction. >> that's extraordinary stuff. which venue will we socialize with other people? i mean, shopping the mall, that's a venue where we see other people and interact with other people, and the bank is another example, and you're-- and you know. >> i think there is interaction, social interaction at the mall and there's not much at a banking center and not many people go. the place where we'll go with interacti interaction are places like coffee shops. stuart: what are you doing about this? >> i've actually cut out caffeine. stuart: you started this, didn't you? paypal really got payment

on-line systems going. >> we were one of a number, but particularly important in the payment arena, because the only other massive and sort of global scale electronic payment system are the credit cards and the credit cards are doing very well as well. but they are not-- they were really built for a time of physical place to place interactions, paper trance, as, things like that. and you don't have to build the same kind of multi-party system which is essentially inefficient now that we're in the connected age. >> just take me back a ways. was it your idea? >> no. >> was paypal your idea? >> no. >> it was not. you can take credit if you want to. >> i would love to of course, but myself and a number of others were all in the mix. stuart: did you sit around and literally, did you sit around and say, this is a good idea? >> no, no, we actually were the

compensation of two companies x-.com on one hand and i and elon musk were, and another company where max and peter were. they were originally working on an ability to beam wirelessly money from one hand held to another. we were working on building an on-line bank. both of us, you know, pivoted and at about the same time rushed into on-line payments, predominantly on ebay. stuart: bill harris, that was a pleasure. will you come back again? >> i'd love to. stuart: thank you very much indeed. >> thank you. stuart: there's a mystery tipper travelling around the country handing out literally thousands of dollars in anonymous tips. my take on why we are still a generous country. that's next. ♪

how about this, a 11-year-old girl tried to raise money to pay for braces for selling mistletoe. she got shot down because she didn't have a permit. but she's allowed to beg for

the money. and plus, american teens getting mediocre scores compared to the rest of the world. who is to blame for that? and here is my take on the mystery tipper. you heard about this. someone is going around the country leaving huge tips in bars and restaurants and i mean huge. $2,000 to a bartender in michigan. $10,000 to a server at a place called "the hungry cat" in los angeles. the identity of the tipper has yet to be revealed, but he or she leaves a clue: @tips for jesus is written on each receipt. last year around the holidays there was a similarity of generosity and remember the layaway angels and people paid for people's purchases. and then the gold coins tossed into salvation army kettles with no recognition or tax

break for the giver. this runs against the grain what you've been hearing about america. there's a constant drum beat about mean corporations and c callous americans and in short, the left hates charity and they want to take it because you've got it. i think we're going through a bad patch, actually. the real america is still there. it's just lost its public voice. that's why the mystery tipper, the layaway angel and the coin in the kettle stories, that's why they're so important. they remind us that america is a generous country and americans are quite prepared to give anonymously and without reward. it's a great country. ut fires. so i deserve a small business credit card with amazing rewards. with the spark cascard from capital one, i get 2% cash back on ery purchase, every day.

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cannot sell sprigs of mistletoe. welcome to the rules of lawyers. rest assured, charles payne is here. ♪ the numbers for on-line sales yesterday, monday, so-called cyber monday, they're in and they confirm what we've been saying all along. on-line is king. monday on-line sales up 17 1/2% from last year, 29% of those purchases were made on a smart phone or a tablet. that's going mobile. amazon's monday sales up 44% from last year and ebay sales shot up 32%. this i am calling a retail revolution. charles, am i going too far? >> absolutely not. the revolution has finally come around after about a dozen years, it's with us big time and i've got to tell you, of all the names, obviously, amazon has done well and google

i like ebay a lot. stuart: really? >> i'll tell you why. they've had a lot of momentum coming into december and the same-store sales last week of november up 32%. for next year the growth on the top line should be about 15%. stuart: when you say top line. charles: the revenue growth. stuart: the money coming in, up 15%. charles: versus google 15% and amazon 22%. and amazon and google are up and ebay is relatively flat. two years ago they got an acquisition of a company that does transfers to your cell phone number. of course you've got paypal and you good this zon to it. stuart: they're riding the wave of mobile devices shopping on-line and making it easier. charles: the mobile is actually what probably made the on-line revolution possible. because we have the on-line all of this time, but it's the

ability to do this over the phone that's really put jet fuel into this thing. stuart: it's exploding 29% of on-line sales done by one of these things. i'm getting it. charles: and you haven't bought anything from your cell phone? >> no. charles: neither have i. stuart: but my kids do. charles: my son does everything on the cell phone. stuart: we're down 45 points and we had been down 60 or 70 and now down 44, shy of 16,000. here is another on-line mobile sales winner, it's called groupon, record sales this past weekend. so, nicole, how high is the stock? >> i was about to say, how high was the selling, the best four days since their inception. groupon up at 9.32 a share. and they had the record sales over four days and it's almost like groupon is ala style of amazon. and they sold toys, they sold home goods, they sold tons of

keurig coffee makers. stuart: i don't think of it as an on-line sales machine. >> me neither and 50% on the mobile devices. completed on mobile devices. stuart: excellent, nicole, thanks. charles you like groupon? >> we traded it earlier and we had a nice pop on it. i like it, anyone in it, there was a downgrade on it yesterday, may want to consider, maybe a $1 stop loss from here, but it looks like they're getting their act together, it could be a long-term buy and hold and put on the shelf. stuart: and i want to tell you about the car sales, the big three, used to be called the big three, general motors just reporting a 14% sales increase year on year. gm stock, by the way, now at $38 a share. earlier, we saw ford came in with a 7% gain, year over year.

chrysler doing very well, up 15%, that's year over year. so, i'm going to call it pretty strong car sales for the month of november, following a strong october. you know, we've got a sad statement on the future of this country. 15-year-olds made no progress on achievement examinations and fallen further in the rankings down to 31st in math, 24th in science, 21st in reading of all things. and political prospect editor kelly mcnerney joins us and who is to blame for this? >> honestly, i think it's federal government spending we're using as a remedy, just throwing money at the problem. when you look at the numbers, it's startling. we spend $15,000 per every student in this country on education and that's more than every single country in the developed world and japan beat

us in the international ranking that you mentioned and we're throwing money at the problem. it's not the lack of spending, it's the character of the spending. it's not trickling down to the classroom, it's federal government regulation and it should be a state-run education should belong to the state and no child left behind. it usurps a lot of power from the states and that to me that's the problem not relegating to the states. stuart: you'd get rid of it-- not all of it, but some of the bureaucracy because that's where the money is flowing, the administrators of the schools and all kind of people backing them up, the bureaucracy. you'd get rid of that. >> yes. stuart: but can you? kayleigh, you can't, you can't do that. i mean, the unions are so firmly entrenched and there's a big vote in favor of those unions. in favor of teachers, and i don't know if you can get around that? >> yeah, and i think you hit the nail on the head, stuart. the teachers unions essentially hold the democratic party

captive so democrats oppose the school of choice and oppose the meaningful reform and bobby jindal in louisiana had a great voucher program and allowed the kids from lower income communities to go to private school and have the same opportunities that a lot of us were afforded. but the irony of it all in protecting the teacher unions, president obama and the democrats are hurting the very people they claim to want to help, the lower income communities by shielding the teachers union. stuart: charles, who is to blame here? >> kayleigh, i start with the parents. and some parents are happy when they get an a on a watered down test. they come home with a report card not reflective of their achievements and they're work hand-to-hand and who the democrats keep voting in. >> charles, that's absolutely true and it definitely starts

in the home and we need the parents to be the enforcers and be sure their kids are on track. and the kids are just stuck in failing schools, failing communities and then they have teachers, or parents, rather, like you said, giving em this the thumbs up for the watered down a-plus test. it's a two-prong solution, it's the teachers and the parents. stuart: how come in we're in such a mess education-wise in america, we're still by far and away the most innovative society on the planet especially when it comes to technology? that's a contradiction, it, kayleigh? >> it's true that's a contradiction yet, i think that americans, one thing that we have we're well-rounded. there's an emphasis on sports, on other activities and an emphasis on entrepreneurship and all of those things combine to make a well-rounded wholesome individual. that being said the lack of academics, the lack of education can have a real effect in generations to come. if we don't remedy the issue

and em bolden our schools and create well-rounded individuals it's going to hurt in the long run. >> i've got to tell you something, we've got a false security in talking technology stuff. when i go to hospitals and look at the surgeons, i see, i don't know, maybe it's because i've been to new york and california and well over 50% of the top surgeons are either-- weren't born here or their parents weren't born here. think about silicon valley for a moment and the companies created right now. about 40% are from people from outside of this country. they're begging, they're lobbying washington to let hem hire more people from outside of this country. and you know, we've got the tech companies headquartered here, but the people populating them when you look at annual reports and looking at the names making their way to the top. none of these people were born in america. we have a false security if we think because ibm is located here and google and all of the companies that somehow is reflective of america, it's not. you go inside those companies and you'll see a disaster. you'll see exactly how bad it is and despite over $15 minimum

wage is stupid, we need to be getting these kids education, science, technology, math, get them in google, let them start googles, because i'm telling you pretty soon we'll look over and the only thing we have is a shell based in america and everyone working there will be from a different company. stuart: we're getting news from a courtroom in detroit where the judge is giving the ruling on the city's bankruptcy. are they allowed to declare bankruptcy or not? first off, the court finds city has proved it is insolvent. the judge just said it. that's from our own jeff flock inside the courtroom. we'll bring you more details as they break. but the judge has just said, yes, detroit is insolvent. that's important. all right, everyone, kayleigh, thank you for joining us this morning. by the way, i understand you sat-- she's gone. you know, she sat an important exam yesterday. i want to know how it went. charles: oh, yeah, i think she's great. stuart: we'll bring her back and ask her. to washington, president obama will renew the obamacare pitch

today talking about everything good about the law. should be a short speech. meanwhile on capitol hill more political theater. rich edson watching it in d.c. rich, what is this hearing all about? >> with he will -- well, stewart, the title is the president's constitutional duty to faithfully execute the nation's laws. basically what the republicans are looking at. the moves the administration has made delaying the employer mandate. allowing health insurance companies going against the laws, it was written against the changes and essentially the laws r they have he a phased out. and what the republicans have charged the president with, selectivvly enforces parts of obamacare and whether or not that's constitutional and that's the examination, started ten minutes ago on the hill. stuart: do you think anything is going to happen as a result of these hearings? >> i think we're having four hearings this week and they're about whether or not the

administration can keep to the correct line with telling the truth and making sure that basically they don't get caught in a political misstatement on capitol hill. that's what it's been about for weeks here. stuart: you're going to cover it for us, rich, you know that, don't you? >> i do. stuart: lucky you. rich edson, thank you very much. >> thanks, stuart. stuart: to stocks, back to them. netflix about to launch its first ever new series for children. nicole. nicole: right now it's to the down side. don't forget what a big winner it's been making deals left and right and this year, obviously, running up and making deals for more availability for their subscribers and now, this is about turbo. turbo the movie. there's going to be a series called turbo fast and this will start on december 24th. you to -- you know they have a lot of original programming and that helps so much. and they say the kids programs are watched over and over, but they say they draw more than 2 million viewers with that

alone. you know kids, it's not like my day i'd come home at 4:30 and watch brady bunch at that time. kids on tablets know what they want when they want it. stuart: you're not that old, nicole, stop doing that to yourself. see you later. >> see you later. stuart: best stock i've seen so far today is apple now up about $10 we're going to follow that for you. happening right now, a judge just saying that detroit has proved itself, yes, insolvent and the detroit bankruptcy, yes or no just after this. ♪ for fun he says, get a job ♪ that's just the way it is ♪ some things will never change♪ ♪ that's just the way it is ♪

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moments ago a judge ruled that the city has proved it is insolvent. remember, there are a total of 18 billion in the hole and judge andrew napitano is here. okay. so, the judge says, yes, you are insolvent. there's one more hurdle to clear before they can formally said to be bankrupt. >> yes, normally an in bankruptcy, when the bankrupt estate, an individual or a corporation owes a lot more money than it owns, people are happy to go into bankruptcy because they'll get 10 cents, 15 cents, maybe, 50, 60 cents on the dollar, but when you have a labor union which has imposed upon the city a burden into the tens of billions of dollars that they don't have. they don't want 10 or 15 cents on the dollar, they want 100. and let us sue the city and we'll win. >> the judge said in the courtroom he will not rule today on those pension

liabilities. okay. >> i don't want to second guess the judge, i don't know the tech for mat, but the judge must first rule whether the city is truly bankrupt. he said yes, and then whether they've truly negotiated in good faith. the union says the city won't talk to them. if the judge finds that the city did negotiate in good faith, then the city is truly bankrupt under chapter 9 and he, the judge, will take everything the city owes and everything the city owns and slices and dices it. >> and at the end of the day it's highly likely, is it not, that detroit will be bankrupt? >> yes, this is an important model. people may say, i don't live in detroit and never been in michigan, what do i care? you know what? it's an important model because there are other major municipalities in the united states on the brink of this will set a pattern for other cities throughout the-- >> and mostly about those

pensions. >> yes, this is, most of this is about pensions. stuart: judge, hold on. okay, the judge also said if the city had not deferred its pension contributions, it would have run out of cash in january of next year. so there you go. look, the bottom line here is if they go to bankruptcy, that is the only way you can discharge these pension liabilities, which are crippling municipal governments up and down the country. >> yes, and doesn't mean that the pensioners will get nothing, but they cannot get 100 cents on the dollar because they impose burdens on the city, through the political means, far greater than the city could ever pay and now those burdens, those bills are due. stuart: this is the only way, is it not, that you can get the pension liabilities-- >> under our system, yes, the only way and i think this will set a model for many, many other municipalities, cities and counties throughout the country that are teetering on

the brink of bankruptcy and looking to detroit for an example. stuart: it's a huge fight? this is a big deal for everybody? >> this is enormous, if they bankruptcy did not go through, there would be nothing left of detroit. stuart: that's interesting. >> the police couldn't work because they wouldn't get paid. fire couldn't work, hospitals and schools would close, people would leave, vast swaths of city land unowned. stuart: if the judge says no, you're not bankrupt, if he says that detroit collapses tomorrow morning? >> yes, because then the thousands and thousands of human beings and entities that are creditors of detroit will be left to filing lawsuits, each of which would require a jury trial. stuart: oh, goodness. judge, please, will you stay right there for a second? the judge has ruled that detroit is in fact insolvent and has not ruled whether the bankruptcy can move forward and he said he'll not rule on the

pensionsment and says that if they had not deferred the cash for pensions, that they would have run out in january. and stay there. i give everyone my take on appropriate francis and his take on capitalism. for the left that did not set too well and find out what they're saying about me, calling moi after the break. ♪ silent night, holy night [ male announcer ] here's a question for you.

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. stuart: i go to church to save my soul, it's nothing to do with my vote. pope francis has linked the two and offered direct criticism of a specific political system ap characterized negatively that system. i think he wants to influence my politics. apparently not everyone liked my take on the pope from last week. and one calling it, quote, the worst right-wing statement of the week. and judge napitano is still here. [laughter] >> from this traditionalist pre-vatican to his dear anglican friends, i'm with you.

and the pope and church is to save my soul not my pocket book. stuart: i was making two points. i was disagreeing with the pope who does not like free market capitalism. individual liberty is best for us collectively. >> no system has alleviated more poor people into the middle class than free market capitalism. no system in history. stuart: right. i thought the pope was really very much in favor of the european social model which is neo socialism which failed its own people and i disagreed with the popeeon that basis and secondly, to your point, i don't want to mix politics with my spiritual life. when i go to church, i do not wish to have my vote counted for by the preacher. i don't want idon't want any me politics whatsoever. and you know, i think you and i agree on this. >> yes, we agree on this. look, the pope is confident to teach the church and the world

on matters and faith of morals and he can talk about social justice, but when the pope says it's the obligation of the government to take from the rich and give to the poor because that's the only way to alleviate poverty, he doesn't know what he's talking about. stuart: now you are a catholic and i'm an anglican and sitting here is i believe a southern baptist, is that correct? >> and we all agree? >> i'm not sure. >> and my wife is a catholic, too. issue, guys, this is how you win popularity in the world these days. this is the pope hit the ground running and extraordinarily popular and we saw a rejection of capitalism in chile and in new york city. and i think it's a larger frightening points. >> the pope was asked recently what's the worst problem in the world, war, generocide?

the answer, youth unemployment. it's hardly the worst problem in the world and nor is it a problem that the church is competent to address. stuart: why does the church stand so much in favor of a failed model? europe has been plunged into depon deponcesy and despair. >> going in the wrong direction. stuart: why would the pope do that? you're a catholic. >> i can't get into his heart, i wish he could stick to faith and moral, which is he's sound and traditional. when he gets into the worst problem, how many angels are on the head of a pin, he comes up with an answer that please the crowd, but do know the warm the soul. stuart: you're pre-vatican 2 or 3? >> don't say vatican 3. there was no vatican 3. vatican 2 was enough. stuart: is it banned in the united states?

>> no, pope benedict xvi still alive and no longer reigning issued a decree that every priest is allowed to say the service in latin, but many are talking out of traditionally, and into english. and it's been trivialized and that's not fault of this pope. stuart: do you have any comment on the latin mass? >> not the latin mass, but it's a gigantic issue and glad we're talking about it. it's further than the catholic religion and the pope. >> the pope moves huge numbers when he speaks like this. i don't know if these people vote, i assume they do, but the pope's popularity-- >> all over the world, he is a rock star. an absolutely rock star. stuart: nice way to wrap it up there, charles. thank you indeed and judge, as always a pleasure. up next two points for our resident geek, and more people shopping on mobile device, two,

we have the numbers to prove, yes, we're right on that one and he will also respond to this, does he really think samsung will be a winner with the new smart watch? >> it isn't market ready yet. there's lots of kinks, notifications don't always work, it's a little clunky and they said themselves. stuart: interesting. every day we're working to be an even better company - and we've made a big andcommitment to america.ts. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

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>> earlier today liz macdonald was on our program showing that prominent bears and other people that think the market will go straight down. some prominent bears are now in retreat and say that the market is going up next year and go up big time. sandra smith in chicago, what do you make of that? >> well, from a traders perspective. timing is everything. whether you're talking about the next week, the next month or the next year, you're going to get a lot of varied answers and that's causing the volatility right now. the vix is skyrocketing. uncertainty a skyrocketing, and fear in the marketplace is sky rocketing. the s&p 500 is up 26% this year, the dow is up 22%. and if you are responsible for managing someone's money or a fund's money and your job is to

track the s&p 500 you're probably going to lock in the gains you've got and go home of the rest of the year and that's why we're seeing the selling the past several days, there's no need to put that money at risk in the final weeks of the year if you've already got 30% returns on your investment this year in the stock market. so, we are seeing a lot of investors running for the exits the final days of 2013. stuart: when bears reverse themselves that could be a sell signal in itself. when the pros say no, no, the market is going up straight this year some will take that as ho-hum selling because they're going to be wrong. i'm sure there's some of that out there. >> well, the definition of a bubble is when asset prices rise to a level that doesn't meet the underlying fundamentals of the market, right, stuart? and that's why you had all of these bears piling on saying this can't last. when you start to look at the fact that we're starting to get improvement in economic numbers and corporate earnings look

good and charles points that out. then the bears start to ask themselves, well, if we get a dip in the stock market, when do we start to turn around? 2014 could be a good year and they're starting to prepare for that. stuart: sandra, thank you very much indeed. we've got the resale headlines for you now, it's all about on-line. nearly half the people who shopped, did so on-line and traffic at bricks and mortar stores were down 4% this calendar year. okay. down, that's actual sales, and that's traffic. a number of people going into bricks and mortar stores down, on-line selling straight up. here is the man who used to run paypal and he's going to say what happens to shopping malls as a result of this. >> i think the mall of the future that we already have today. it's amazon, ebay. ebay for used, amazon for new, upscale products and i don't

think you have anything that replaces those upscale department stores. i think you have smaller malls more convenient to people and you don't have to travel as far without the necessity of the big anchor tents. stuart: let's bring in jeremy kaplan from fox news.com. the future of the shopping mall, what do you think of that? >> i think that's absolutely the case. stuart: the future? >> i did not go into a single mall in the past couple of days, not a single store. i did my shopping on-line and i had a bunch of things to get, they were accessible. stuart: accessible on-line and easier to shop on-line. and don't have the traffic. and i said it's a revolution and a triumph for on-line and retreat for bricks and mortar. i'm calling it a triumph revolution, too far? >> i don't think so. you're absolutely right. and the other aspect, it's a triumph for stuff like ebay and amazon clearly succeeding and

also a massive triumph for companies like apple and android and the google operating system. stuart: why? >> of the on-line sales, one in three purchases was done on mobile devices. one in three. not only are we buying the things we knew we were buying them. they've transformed our lives and we're browsing the internet and shopping and putting the credit card numbers in the phone and don't have remorse about it. stuart: it's a true revolution in shopping. i've got my iphone here, are they making it easy for me to shop with this thing? >> the iphone in particular, the numbers i have, will blow you away. apple dominates e-commerce with 80% of mobile orders yesterday. 80%. stuart: that's apple, the iphone? >> not the galaxy or-- >> samsung did better and the google operating system is up 13% of sales last year. 20% in year is google powered local devices, that's a big

step forward. apple at 80%. >> are they doing something well that samsung and enjoyed have not? >> i think they've convinced us all, it's a friendly easy to use interface and no one is i go this about what about those guys trying to steal my bank account? it's become such a part of our life. stuart: apple stock is up $10 the last time i checked. so they're responding to what you just said. >> there you go. stuart: and at 560 on apple as we speak and another thing for you, jeremy. yesterday, samantha murphy from matchable.com called samsung one of the big tech losers of the year. she didn't like the watch. you love the watch. >> we disagree with that. stuart: you thought that was one of the great technological innovations. defend yourself. >> it is. it is hands down the best smart watch that has ever been. stuart: so what? >> well, part of one of the

reasons that it's great, the reason it's great, is companies need to innovate. it's the one word that everyone talks about in the tech world, who is innovating. where is the innovation and samsung is the company doing it. they brought the smart watch to market and the best one yet. >> wait a second, google glass iswarable computing power and the watch is wearable computing. >> google is the heart of innovation and i think the smart watch, well, it might not be the perfect product and i think that's what they were saying. and however, it's the best one yet and it's the company behind the best smart watch yet and i think it says a lot about where samsung is going. stuart: a reasonable position. not bad at all. jeremy, thank you, indeed, sir. the jobs report is out and whatever the number, expect this. until we get real economic growth. i say 4%, what we're going to

need. we're going to be stuck in the obama economy. we're going to talk to tray grey knippa he's in the studio next. ♪ a very merry christmas and a happy new year♪ ♪ let's hope it's a good one ♪ without any tears

>> the headline for this holiday season on-line shopping rules. cyber monday as some call it, sales up 17 1/2% from last yearen now break that down. amazon sales just yesterday up 44% over the previous year. amazon down this morning, however. the stock. ebay cyber sales on monday up 32% and that stock is up another 1%, and apple, ipad sales made over 17% of target's total sales over the weekend. no wonder apple is up nearly $10. and tesla says that germany had as probed the car fire and we'll assume no further measure and investigation closed. and krispy kreme donuts forecasting a disappointing outlike.

don't do that, the market hates it, down 16%. tres knippa is next. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

icht. stuart: breaking news from detroit. this is important for the whole country. the bankruptcy judge ruled that pensions get no more favorable standing over other creditors, that means pensions will be cut. a huge victory for the city. a huge loss for pensioners. no word on how much pensions will be cut. that will come later when the city files plans for reorganization. that is blockbuster news for

every municipality that's under pressure. well, he's not in chicago. and oh, no, tres knippa is here. welcome to new york. >> thank you for having me. a delight to be here. stuart: what i want for america is 4% growth. 4%, 5%, 6%, i'll take it, i want growth. i think that would go a long way to solving some of the problems that we have. you follow these things. when am i going to see 4% growth? >> stuart, the gdp growth is simple and you get it by increasing productivity and increasing population. what policy changes have we seen coming out of washington that would increase productivity? mandatory health care purchases? i'm sorry, health insurance coverages? lower interest rates to zero, increasing money supply? which increases productivity? >> you're telling me i'm not going to get 4% growth soon. >> i'm skeptical. i can point the finger all day long. there are good things that we could do out there.

and here is a simple one. natural gas trades for $16 in japan and trades for $11 in europe and $3.80 here. let's build l and g terminals all over the coast of the united states and let's start exporting it. to me, it's job, revenue. >> and at that sounds like a theme, go get the energy which is ours and that's the theme and cuts for corporations as well. you're not going to get it. it's not going to happen in the next three years. >> i wouldn't think so. stuart: what's the normal 2% growth? >> i'm a trader and got to go with the trend and more of the same appears to me. i don't see any big policy changes in washington that are going to right this ship and get it to what i was talking about, increase in productivity or even talk about the increase in population part, too. stuart: hold on a second, what happens if we slip into another recession? because we can't print anymore money to get us out of it, can we? we can't do that, it wouldn't

work and the president is not going to cut taxes, not going to stimulate private sector demand. we're a real mess if we get into a recession, aren't we? >> what you're saying is, it seems like policy makers are coming out and that's the worry. is it possible that we plod along? president obama doesn't care about ten years from now, he cares about the next three years. is it possible that we plod along? >> he doesn't care about the next three years, does he care about his ideology and where he stands with the people that believe in that ideology, or america and the economy. and it seems he's more concerned with years from now. >> the point about natural gas, why don't we see the l and g terminals on every coast and every city. line let's export natural gas. that he is a conflicts with the ideology. stuart: we know you as a trader, we have to ask the following question. what's the worst trade you ever

made. >> simple, warren buffett said what you should do when you buy stocks, go to your house and buy the companies of the things that you use every day. stuart: and charles payne said that. >> when i first got my ipod and played music never mind if i ever imagine i would be able to make a phone call from it in a few years and i bought my first ipod and running on the chicago lake front and listening to the ipod, all of my songs are on it. fantastic, and i went out and bought apple and i bought a lot of apple and i read in a magazine report that said that apple actually owns the real estate where all the apple stores are, and that by apple you weren't owning a technology company, you were owning an reit. i had exposure to real estate and didn't want more and i sold apple and a lot of it. >> oh, oh. >> and now in the previous segment you had to rub it in my face? thanks a lot, stuart. stuart: so sorry.

will you ever come back to new york? >> be delighted to. stuart: tres knippa, thank you for being here. >> you bet. rehitting the breaking news from detroit. reiterate this. the big news, the bankruptcy judge rules pensions can be cut. a huge victory for the city, a loss for pensioners, no word how much the pensions will be cut. that comes later when they formally file for reorganization. more varney after this.

>> coming up on lou dobbs tonight 7:00 eastern. do you still want to fix obamacare, really? a doctor joins us to tell us what really needs to happen to improve health care and access to it. so much for obamacare. join us tonight at 7:00 easte eastern. stuart: all she wanted was to sell mistletoe so she could save up enough money to pay for her braces, but 11-year-old madison root was told by a security guard she could not sell mistletoe next to the foun in downtown portland because of city laws. she suggested that she beg on a street to cover her costs. charles? >> it really is a shame. it is heartbreaking and listen, forget about the entrepreneurial spirit. stuart: up to that point she

sold seven bags for five bucks. and my son went through the same thing. he was selling candy at school and a teacher saw him at a big event and made him give back the money and i mean, this kid is still livid over that. the good news for madison, after the story got out. a man called and bought 30 bags and another donated $1,000 for the braces fund. and when the country says begging is a better option than pulling yourself up by the boot straps. stuart: and they don't want a free all all downtown. >> one little girl 11 years old, a security guard looks the other way. stuart: no, no, the law doesn't allow for discretion. >> the law doesn't, but people do. stuart: and you didn't stop her, you're stopping me. >> i would have looked the other way and took a college

course and maybe both improved our lives. stuart: you're a good man. i don't care what they say. charles: they say a lot. stuart: everybody, i am a pretty big tipper, i think, but there is an even bigger one running around the country. your take on the mystery tipper after this break. hi honey, did you get e toaster cozy? yep. got all the cozies. [ grandma ] with n fedex one rate, i could ll a box and ship it r one flat rate. so i kn untilt was full. you'd be crazy not to. is tt nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.

our i gave you my take on the mysterious to upper going around country leaving enormous tips in bars and restaurants. this reminds us many americans are really quite prepared to give without any reward. here is what you had to say. gary says yes, we are all generous, some with our own money and some with everyone else's. larry as the left is always generous and wasteful with taxpayers' money but not their own. i like that one too. we are not talking a few bucks.

some of these were thousands of dollars anonymously given. charles: 5,000 to $10,000, a lot of them, tips for jesus on the receipt which are fantastic and it is a beautiful thing. it happened the law during football games. you are a waiter or waitress who gets a chance to work this sunday take it. stuart: the tips were given at football games. before these message that says final written on the receipt of this is a wonderful thing. that time of year. the point you made another reflection that doesn't get enough inclination how great we are to each other. stuart: we are told we mean, nasty people. we are not. americans are not. the most generous people in the world in my opinion. charles: i hate when they give you the management -- mandatory tip. i usually tip more than that so they should themselves and the foot. stuart: i used to be a waiter so i tip big.

dagen: worked in bars and restaurants, golf course, you know, tips matter to everybody. thanks. default's bankruptcy in the spotlight. the fallout of today's ruling for the rest of the nation. janet yellen says there is no stop bubble but what about bonds? the president tries to get the disenchanted young on board with his health care law. will that work? the miscue over first down in sunday's redskins giants contest could turn the average nfl game into a laser show. we are looking forward to that in the next hour of markets now. connell: they to it. a lot of news. dagen: motor city, auto sales. connell: first to nicole petallides on the floor of the stock exchange looking at today's markets. nicole: good morning. good mo